The Financial Risk Of “Doing the Right Thing”
Organizations’ leaders are increasingly beginning to realize that corporate social responsibility (CSR) efforts should be tightly linked to their main business activities. Some of the most commonly debated issues surrounding this topic include tax avoidance, deregulation, and compromised product safety in lieu of profits. What do you think? How important is it for organizations to build sustainable businesses that benefit future generations and protect the planet? Are there any companies that you either fully support or refuse to support based on their approach to CSR? In this Discussion, you will explore an example of an organization that incorporates CSR practices and will consider any potential negative financial impacts as well as how to overcome negative outcomes.
To prepare for this Discussion:
• Consider examples of CSR practices that could have a negative financial impact (losing business associations, having an unintended negative consequence on another group through CSR practices, etc.). The examples could be from an organization that instituted the business practices or from another group that was directly or indirectly affected by those practices.
• Reminder: Be sure to be aware of any personal biases you may have about the organization or CSR practices you discuss this week. Also, be sure to support your assertions using an evidence-based approach.
Post an explanation of how ethical and/or positive social change practices can help an organization mitigate risks of engaging in CSR efforts. In your explanation, do the following:
• Identify at least two examples of CSR practices that had or could have a negative financial impact either for the organization or for other groups. Be sure to include what that potential impact could be.
• Analyze the risks and benefits of instituting CSR practices and include which one outweighs the other (i.e., risks vs. benefits).
• Propose how an adherence to ethical standards and/or a drive toward positive social change can help managers overcome negative outcomes. Include how this adherence could apply to each example you provided.
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